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Ontario mayors urge Trudeau to protect auto sector from TPP deal

November 13, 2015

Fresh discontent is surfacing over the Trans-Pacific Partnership trade deal that Canada signed in the dying days of Stephen Harper’s government – uneasiness that Justin Trudeau’s Liberals must confront as the job of ratifying the accord falls to them.

Mayors representing 20 Ontario cities, from Oshawa to Windsor, with a significant number of auto-sector jobs on Wednesday called on Mr. Trudeau, the prime-minister-designate, to protect their industry from being sideswiped by the TPP, the largest trade deal Canada has ever undertaken.

The TPP agreement reached on Oct. 5 by Canada and 11 other Pacific Rim countries would eliminate Canadian tariffs on Japanese vehicles and make it easier for manufacturers to use offshore parts in cars. It would be a boon for low-wage Asian suppliers of parts, but a challenge for Canadian firms.

The Ontario Auto Mayors are urging Mr. Trudeau to review the deal to ensure it does not undermine the competitiveness of Canada’s auto sector, which employs more than 115,000 people directly.

Oakville Mayor Rob Burton, chair of the Ontario Auto Mayors, said the Conservative government never answered his request for a copy of the Oct. 5 deal and any side letters accompanying the agreement.

“If I can’t read it, there must be something wrong with it,” he said. “I saw a poll where 19 per cent of people said it was good for the country and I was like, ‘How do they know?’”

In a surprise move, Ford Motor Co. of Canada CEO Dianne Craig in recent days has voiced her disappointment over the TPP deal Canada has struck, saying the U.S. secured better terms for its auto industry. One of the key issues she raised is the period during which Canada’s 6.1-per-cent duty on vehicles imported from Japan will be eliminated under the TPP.

That will happen over a five-year period once the trade deal comes into force, compared with a 25-year phaseout for the 2.5-per-cent U.S. tariff on passenger cars and 30 years for the 25-per-cent U.S. tariff on Japan-built trucks.

Ford and the Canadian units of Fiat Chrysler Automobiles NV and General Motors Co. had also urged the federal government to ensure there was a clause in the TPP that prevented governments from depressing the value of their currencies to spur foreign sales. Such a clause is not in the deal.

Mr. Burton said he agrees with Ms. Craig’s criticism of the TPP deal Canada struck. “I fully subscribe to what she said and strongly support her.”

A poll conducted for Canada’s Asia Pacific Foundation Wednesday suggests Canadians are divided about the Trans-Pacific Partnership deal, with 41 per cent expressing support for the TPP and 38 per cent opposed to the free-trade agreement.

The survey was conducted last month, however, before the deal was announced, including $4.3-billion in compensation for Canadian farmers who may be hurt by the deal, which opens up this country’s protected dairy and poultry markets to more foreign competition. A spokesman for the Asia Pacific Foundation said the organization suspects what’s really holding back support is “a low amount of awareness” about what the deal entails.

Dairy Farmers of Canada, meanwhile, says its members still would prefer that Ottawa had not given away domestic market share to foreign rivals.

“Of course we wish that no market access was granted for dairy,” spokeswoman Isabelle Bouchard said.

She said farmers are waiting to see the details of the deal to determine whether the compensation offered by Ottawa is adequate.